2009-01-22

Jan. 22 (Bloomberg) -- NicOx SA was approached by more drugmakers interested in its experimental painkiller in the past month and will hire a bank for advice in case the talks spark an unwanted takeover bid for the French biotechnology company.

“Talks like those we’re holding could lead to a takeover offer,” Chief Executive Officer Michele Garufi said in an interview in Paris. “We don’t want to be unprepared.”

Garufi, 54, co-founded the company in 1996 and says he wants to keep NicOx independent, which may become more difficult after the stock lost half its value since May. The Italian scientist says he received more approaches since he released final data showing the painkiller naproxcinod has fewer side effects than naproxen, the drug it’s derived from.

“Some companies arrived after December,” Garufi said. “Some talks are more advanced than others.” He declined to name the companies or say which bank NicOx is looking to hire.

NicOx rose 1.16 euros, or 16 percent, to 8.56 euros for its steepest gain in two months on the Paris exchange, giving the company a market value of 406 million euros ($526 million).

Drugmakers like Madison, New Jersey-based Wyeth and Sanofi- Aventis SA of France are looking for acquisitions as $84 billion worth of their prescription products are scheduled to lose patent protection by 2013.

Pfizer, Merck

“What’s interesting with NicOx is that its status is changing,” said Emmanuel Soupre, a fund manager at Neuflize OBC Asset Management in Paris, which oversees the equivalent of $23 billion, including NicOx shares. “It will no longer be only a biotech company doing R&D. It’s turning into a company that will produce a drug that will go on the market and lead to some profits. This makes it a lot more interesting.”

NicOx, based in Sophia-Antipolis, on the French Riviera, already has partnerships with Pfizer Inc. and Merck & Co. Naproxcinod will be its first drug on the market. The company had at least 100 million euros ($129 million) in cash at the start of the year, which should cover its financing needs for two years, Garufi said.

“When you’ve built a company from scratch like I did with NicOx, you don’t want to sell out,” Garufi said. “You just want to grow it.”

The decline in NicOx shares had left the company with a market value of 351 million euros before today’s surge.

NicOx plans to submit naproxcinod to U.S. regulators by the middle of the year and wants to retain some rights to the medication. It aims to have a partner before the end of June, Garufi said.

‘Mission Possible’

“I would have been worried if there was no interest” in naproxcinod “but there clearly is,” he added.

The company has been trying to show that its most advanced treatment works as well as the standard painkiller naproxen, sold over the counter as Aleve by Bayer AG, and without side effects such as high blood pressure. The pooled analysis of findings from the last of three advanced clinical trials confirmed naproxcinod is effective and safer than naproxen, according to NicOx.

The company may only sell rights to the medicine for the U.S. at first, Garufi said.

“A worldwide deal is easier but I am more favorable to signing a deal only for the U.S. at first,” he said. Few companies have the global reach to ensure good sales of a drug worldwide, he added.

The drug may become a blockbuster and garner peak annual sales of $1 billion, according to Garufi. “With a good partner, reaching the $1 billion figure is definitely not a dream,” he said. “It’s mission possible.”

Once an agreement is reached, Garufi said he wants to use the funds to buy “small” products and companies in the U.S.

To contact the reporter on this story: Albertina Torsoli in Paris at atorsoli@bloomberg.netLast Updated: January 22, 2009 11:37 EST